The SDA is determined to reduce the level of casualisation in the retail industry and increase the level of permanency says the union’s Secretary Joe de Bruyn.
The retail industry is the largest industry in Australia in terms of employment and contains approximately 13% of Australia’s total workforce.
The industry is exceedingly diverse, ranging from employees in supermarkets, department stores and discount department stores at one end of the spectrum, through category killer type stores and bulky goods stores to smaller chains and finally to individual businesses staffed mainly, if not exclusively, by owner operators and/or family members.
The number of employees in a retail store varies enormously from Myer Melbourne, the largest department store in the southern hemisphere, with 2000 or more employees, to much smaller stores which are often staffed by just a single individual.
The SDA as a union is well represented across a wide spectrum of this retail industry, and has in recent years been able to grow its membership despite all the difficulties.
The SDA finished last year with approximately 217,000 members around Australia and is therefore in a good position to understand the level and causes of casualisation in the retail industry and how the problem might be resolved in the future.
Why casualisation in the retail industry ?
It is well known that there are many casual employees working in the retail industry, but this was not always the case.
Prior to 1972, the bulk of the retail industry was permitted to open by laws enacted by state governments over 5 ½ trading days, namely Monday to Friday and Saturday morning usually to 12 noon. There were no late nights. There was no Saturday afternoon opening and Sundays and public holidays saw stores closed.
It was the extension of retail trading hours by state governments that started the massive casualisation of the retail industry.
In 1972, the law was changed by the state governments in NSW and Victoria to permit opening on one late night to 9 p.m.
Before this time, retail stores had been staffed largely by permanent employees, many of them working full-time and there was little need for casual or part-time employment. However, the introduction of late night shopping, together with the simultaneous introduction of the 5 day working week for full-time retail employees, meant that permanent employees, particularly full-time employees, could no longer staff the stores for the duration of the shop opening hours. Hence, part-time and casual employment increased enormously.
In the mid-1980’s trading hours were extended again, starting with New South Wales and Victoria, to permit stores to open on Saturday afternoons. This further extension of retail trading hours again had the effect of increasing the number of part-time and casual employees since the full-time employees could not cope with the further stretching of shop opening hours. In retrospect, there is no doubt that the union’s success in making Saturday afternoon work voluntary for existing employees exacerbated the problem of casualisation.
The final spurt in the casualisation of the retail industry came with the introduction of Sunday trading, starting in the early 1990’s in New South Wales, which again saw an increased proportion of employees working as casual workers.
A second factor which has caused the increased level of casualisation in the retail industry is the increasing fluctuation in retail trade over any given day, over a trading week, and indeed the seasonal fluctuations over the whole trading year. These daily, weekly and seasonal fluctuations have a dramatic impact on the number of employees that the industry employs and on the number of hours worked by part-timers and casuals. In particular, there is an enormous peak of retail trading at Christmas which means an enormous increase in employment starting in September and reaching its peak at christmas time.
To staff a retail store in the most efficient way, a retailer employs a minimum base of full-timers, and tops this up with part-timers and casuals to meet the daily, weekly and seasonal peaks of work.
This seasonal fluctuation is seen in the annual membership cycle of the union where a variation of 20,000 – 25,000 members over each 12 month period is regarded as normal.
A third cause of casualisation in retail stores is the desire of management for “flexibility”, even if it is never used. The claim of retailers for flexibility, even if it is not utilised, has led to a large degree of excessive casualisation in the industry. Retailers have the ability to adjust their workforce through the use of these casuals – even though many casuals work regular hours like a part-timer most of the time. The casuals are therefore like a safety valve and provide comfort for the retailer in the event of a drastic impact on employment. The casuals bear the burden of an uncertain working life with minimal entitlements while the retailer has a workforce with great potential flexibility which is rarely, if ever, utilised. The cost to the retailer is greater turnover as casuals change jobs readily in order to find more hours of work and greater job security.
The extent of casualisation
The extent of casualisation in the retail industry is best shown by taking some specific examples.
One large Australian retailer, in a recent official return of information on its employment levels, said that its store employees comprised 20% full-timers, 33% part-timers and 47% casuals.
A second retailer operating department stores said its store employment comprised 10% full-timers, 46% part-timers and 44% casuals.
These statistics, involving a level of casual employment reaching almost 50% of total employees in retail stores, are regarded as quite normal in the retail industry.
Efforts at greater permanency
Ever since the influx of large numbers of casuals caused by the introduction of late night shopping more than 30 years ago, the SDA has made serious efforts to try to reduce the level of casualisation.
In recent years, these efforts may be categorised in three different types of initiatives:
1. The conversion of casuals to part-time employees.
Ever since the union commenced the negotiation of enterprise agreements with individual retailers starting in 1994, efforts have been made to get agreement from the companies to convert regular casual employees to part-timers as part of these agreements.
These efforts have had a significant impact. However, their effectiveness has been limited by two considerations:
(a) the casual who is invited to convert to part-time employment must work a regular pattern of hours. Obviously a casual whose working hours are truly variable, not only in the times when work is performed, but in terms of the number of hours that may be worked per week, is not able to become a part-time permanent employee under the normal definitions of this term.
(b) in order for a casual to be converted to part-time, the casual must also be working on a regular basis at least as many hours as the enterprise agreement provides to be the minimum part-time hours per week. If, for example, an agreement provides that the part-time minimum hours are 10 hours per week, and a regular casual is only working 8 hours per week, the casual cannot be converted to part-time employment.
Despite these two restrictions, significant numbers of casual employees have been converted to part-time employment in most of the major companies, particularly in the major supermarkets and discount department store chains. However, these efforts require constant policing to ensure that store management does not regress to higher casual levels over time.
2. Greater permanency in Coles supermarkets
In the late 1990’s, Coles supermarkets decided to embark upon a radical change in the level of permanent employment in its stores, strongly encouraged by the union.
The company started an experiment in a single store where it engaged a large number of full-timers and filled the remaining positions mostly with part-time employees working a greater number of hours per week than was typical in the average supermarket. The remaining employment, well below 10% of the total, was filled by casuals.
After a period, the company was sufficiently encouraged by the results of its experiment to set up similar trial stores in a supermarket in each state, and following these further trials, it decided to roll out this new employment structure throughout the whole supermarket chain.
The effect was a massive change in employment in Coles supermarkets with significantly larger full-time employment and minimal levels of casualisation. The company found over a period of years that this new employment structure was more expensive because turnover had fallen significantly and so older employees were not being replaced by junior employees on lower wages. However, the lower turnover meant that the cost of continually interviewing and training new employees was reduced, and that the more experienced staff gave a greater level of service to customers than before, thereby generating higher sales.
A further consequence of this change in employment was that the total number of employees in a given supermarket was much lower than before, and this incidentally meant a smaller number of union members per store for the union.
This change in the permanency levels in Coles supermarkets remains the outstanding example in the retail industry of the elimination of large numbers of casual employees. One of the reasons that made it possible was that supermarkets have a relatively stable trading pattern over each week, and over a twelve month period, compared with other types of stores which have greater fluctuations in their trading patterns.
3. A number of individual companies have agreed with the union to systematically seek to convert regular casual employees to part-time work.
David Jones, for example, has agreed that twice a year it will conduct a sweep of its payroll system in order to identify any regular casuals, i.e. casuals with 2 years service or more who are working in a part-time work pattern. A part-time work pattern is defined as an employee who works a minimum average of at least 10 hours per week and has a regular roster that is not subject to frequent variations from cycle to cycle. These employees are offered a permanent position working similar hours by the company.
Another example is Suzanne Grae which earlier this year agreed to increase the level of permanent employment by actively giving preference to permanent employment wherever possible, and minimising the use of casuals. The company’s aim is to have 80% of its store hours worked by permanent employees and the remaining 20% by casuals.
The company has undertaken that, until it achieves the target of 80% permanent employment, its operational officials will only be permitted to hire new casual employees with the express permission of the general manager of the retail operations, or his delegate.
Further, the company has agreed that in September this year, it will write to all regular casual employees who are working 10 hours per week or more to invite them to convert to part-time employment. The company agrees that it will consider any request for permanency from its employees subject to its operational requirements, including the availability of the hours over a sustained period.
All of these efforts at achieving greater permanency have had their impact in retail companies who have enterprise agreements with the union. However, the level of casualisation remains unacceptably high and needs to be reduced, particularly through provisions in awards which still cover much of the employment in the industry.
The union recognises that casual employment will always be part of the retail industry because it is unavoidable, given the retail industry’s unique characteristics. However, we are determined to reduce the level of casualisation as much as possible and increase the level of permanency. At the same time, the union is also concerned to increase the level of full-time employment as much as possible in order to provide sustainable employment in the industry and the opportunity for a career path.
While we believe that the regulation of casualisation by award prescriptions has a definite role to play with recalcitrant employers, we do prefer to negotiate individual arrangements with each retailer which take into account the specific characteristics of the retail company and the nature of the business which it operates.
Joe de Bruyn
Shop Distributive & Allied Employees Association
August – 2004